Superannuation reforms should centre around achieving adequate retirement savings for the majority of Australians and not short-term budget objectives, according to Association of Superannuation Funds of Australia (ASFA) chief executive, Pauline Vamos.
The debate around superannuation has taken a wrong-turn and is now a conversation about tax concessions and access age an ASFA report on equity in superannuation highlighted
It said discussion needed to refocus on closing the gaps in the system for the 95 per cent of Australians that did not have adequate retirement savings.
"A successful retirement system has broad coverage: This means public policy must be focused on achieving better retirement savings for the bulk of Australian population," ASFA chief executive, Pauline Vamos said.
It said a number of groups were in need of assistance including the self-employed, those on parental leave, indigenous Australians, the recently divorced and those under the $450 Superannuation Guarantee (SG) threshold.
Tax concessions and compulsory super arrangements needed work in these areas, according to ASFA.
ASFA said people did not usually choose when to retire which made the discussion regarding access age complex.
"The majority of Australians retiring today have not had the benefit of a lifetime of compulsory super which was introduced 20 years ago. We know for workers who will have the benefit of 12 per cent over their working life, that this will deliver an adequate income.
"But the real issue is that there are significant numbers of Australians, as this report identifies, who are not appropriately covered by the system. This should be our focus," Vamos said.
The paper also pointed to a number of superannuation myths including that high-income earners are well-paid for their lifetime and high income equates with a high superannuation balance.
AMP's Retirement Adequacy Index from June to December 2011 which was released yesterday indicated retirement adequacy had dropped to its lowest levels since the Global Financial Crisis at $49,000 per year.